Job Cuts

The beginning of the end at Citigroup?

Jim Kim — Mon, 17 Nov 2008 14:17:44 -0500

What to make of the additional 53,000 jobs cuts at Citigroup? The cuts, part of an on-going effort to slash the head count by 20 percent from a high of 375,000, are certainly draconian, but they will not be enough. Cost controls alone will not be able to revive Citi. The fact that the company seems to be moving mainly on the expense side is not a good sign.

Even if Citi had agreed to merge with Goldman Sachs, these sort of job cuts would have happened, but the remaining core would have emerged in stronger shape. As it stands now, Citi will merely be smaller. The strategic equation has not changed, which raises the issue of accountability. Citi is starting to resemble the McCain campaign--as the inevitable becomes clear, the infighting really kicks up. Whenever a board is forced to issue a statement standing by its chairman, you know something is wrong. We'll get something dramatic fairly soon.

For more:
- here's an AP article
- CEO Vikram Pandit on the cuts. Video

How bad will the Wall Street job cuts be?

Jim Kim — Mon, 10 Nov 2008 11:06:52 -0500

The Financial Times reports that banks are finalizing their budgets for next year and that many are planning more job cuts. The number could hit 70,000, which would add to the 150,000 jobs the industry has already shed. Not surprisingly, the cuts will be centered in investment banking and trading. Previously announced job cuts are now being executed, so if you work on Wall Street right now, it's pretty bleak. Some of you will survive and the others may ultimately be glad they didn't. You can't be shy about trying something new at a time like this.

For more:
- here's the article

Are a lot more job cuts coming?

Jim Kim — Thu, 06 Nov 2008 12:21:32 -0500

Have we seen the worst of financial services job cuts? Well, here's one way to look at it: If banks were bent on maintaining their compensation ratio--that is, their compensation costs as a percentage of revenues--they would have to lay off many, many more employees, concludes eFinancialCareers. It says the results of its analysis "range from the farcical (Merrill Lynch) to the disturbing (Credit Suisse), and the reassuring (Goldman and Morgan Stanley)." More specifically, Merrill Lynch would have to lay off more than 58,000. Credit Suisse would have to lay of 16,000. JPMorgan would have to layoff more than 5,000. Meanwhile, Goldman Sachs and Morgan Stanley would not require any additional layoffs.

For more:
- here's the item

How to transition your career with grace

Jim Kim — Mon, 27 Oct 2008 15:12:15 -0400

Chances are you know a lot of hurting people right now. The industry is in one the worst down cycles of the past 20 years, and it's going to get worse before it gets better. Most of you do not have time to sulk, but hopefully you've been wise with your money and given yourself some time. Let's face it, not everyone will be able to find work in the same field. You may have to move on.

Jenny Hourihan Bailin, a former senior investment banker who lost her job, was given only a few hours to clear out and leave the industry behind. In the end, the change was a blessing. After 26 years, she was ready to move on. She landed in the non-profit world and couldn't be happier.

For more:
- here's her story

Wall Street firms to axe more jobs this fall?

Jim Kim — Wed, 03 Sep 2008 09:14:12 -0400

Summer proved to be a cruel season on Wall Street. The bloodletting was fierce. But as Breakingviews notes, the picture could get even worse come fall. Historically, job cuts have been mild in the summer, only to be followed by more substantial cuts in the fall if budgets became in tighter than expected. But with severe jobs cuts already made, is there room for more? The answer would seem to be yes. The current malaise may end up rivaling the downturn of 1972-74, when about 17 percent of securities firm employees lost their jobs. In New York City, one in four got cut. We're not at the level yet, but who knows? There could be another leg down in the credit crunch. No one should feel all that safe.

For more:
- here's the Breakingviews article

Wachovia turnaround underway?

Jim Kim — Tue, 12 Aug 2008 08:08:23 -0400

The pressure is on for Robert Steel, the new CEO of Wachovia, who has raised the number of jobs the bank will cut. The AP reports that in a quarterly SEC filing, the bank says it expects to eliminate 11,350 positions, including 6,950 active employees and 4,400 open positions. That's about 600 more than previously planned. All will be in the mortgage area. Wachovia estimates that all cost-cutting steps will boost Tier 1 capital by more than $5 billion by the end of 2009. A lot is riding on the state of the real-estate economy. If the situation improves measurably, Wachovia would certainly benefit. To be seen as a pure play-like winner, it would need to clear up all the regulatory issues. The latest is that its municipal derivatives group is under investigation.

For more:
- here's the AP article

Wall Streeters taking the hits hard

Jim Kim — Wed, 28 May 2008 18:28:26 -0400

If you've been around long enough, you've seen this sort of thing before. When the bubble bursts, the job cuts come willy nilly, stealthily or not. The media latches on, and pretty soon we see the obligatory articles quoting psychologists who have seen an uptick in business from laid-off, reeling Wall Streeters. This time around, the anger is raw and real. This New York Times article is a good read. It's tough getting real work done when you know the axe is swinging. Frankly, we all react in different ways. Some will suck it up. Others will crumble. Of course, Wall Street "happens" in booms and busts. It sounds like a cliché, but you've got to somehow turn it to your advantage. Easier said than done, I know.

For more:
- here's the New York Times article

Employment situation worsens in NYC

Wed, 21 May 2008 06:59:58 -0400

Recall that in March, New York City's budget office predicted that 20,000 jobs would be lost in the financial services sector. It now says that total job losses will run to 33,300 jobs, notes Financial News Online. More than 17,000 of those job losses will have taken place in the the last quarter of 2007 through the first half of next year. So we're in the thick of it right now. Of course, these projections can, and likely will, change. The most recent forecast by city planners also suggests that a local recession may be starting; it likely will last longer than the rest of the country. This will feel like old hat to a lot of you. We can all feel especially bad for the ones just starting out. But such times eventually can amount to opportunity. We'll survive.

For more:
- here's the Financial News Online article

Stealth layoffs hitting Wall Street

Fri, 16 May 2008 06:59:57 -0400

It's not paranoia if they're really after you. And so it goes on Wall Street. Financial institutions have announced some 65,000 layoffs since summer, and people are understandably nervous. The New York Times reports that unlike past rounds of massive job cuts, this one is proceeding piecemeal, in a way that often gives employees little notice. At some banks, the article reports, the first clue you've been let go is that your corporate email stops working. This is a terrible way to go about the sordid but necessary business of laying people off. You can bet productivity has crawled to a halt. No one can work while the axe is swinging overhead. Where it lands, no one knows. These aren't job cuts so much as job nicks--lots of them. Hang in there, folks.

For more:
- here's the New York Times article

Still wondering: Is the worst over?

Mon, 14 Apr 2008 06:59:54 -0400

Last week, Lloyd Blankfein, CEO of Goldman Sachs, threw his lot in with John Mack, his counterpart at Morgan Stanley, and told shareholders that there was light at the end of the tunnel. That's a view we've been pushing as of late, but it's fair to say there's a lot of cynicism about it. The run-up to this week's earnings announcement from Citigroup and Merrill Lynch seems to have led to some anxiety. No one would be surprised at some big writedowns. In fact, people expect it. Same goes for job cuts. There will be more. The issue is whether we're now at the bottom of the trough. I tend to think we are, though that hardly precludes more pain.

For more:
- here's a Financial Times article